HP chairman steps down in the wake of corporate difficulties

Hewlett-Packard Chairman Ray Lane stepped down on Thursday as the head of the historic PC maker’s board of directors following a mismanaged acquisition of software company Autonomy.

As we reported in November, HP announced that an internal investigation had found "accounting improprieties, misrepresentations and disclosure failures" in the financial records of Autonomy, the unstructured "big data" analysis software firm acquired by HP in 2011. HP said it had learned of the issue after being tipped off by "a senior member of Autonomy's leadership team." The disclosure came as HP took a non-cash accounting charge of $8.8 billion—over $5 billion of it related directly to Autonomy's alleged book-cooking.

Two other board members are also now leaving, and Ralph Whitworth, a well-known investor who joined HP’s board in 2011, is taking over as the new interim board chairman. As we’ve reported in recent months, HP has been in deep financial trouble and has notable problems ahead.

“The firm that I represent, Relational Investors, owns roughly $800 million worth of HP’s stock,” Whitworth wrote in a statement. “So, I can assure you that my interests are completely aligned with those of our shareholders.”

“The firm that I represent, Relational Investors, owns roughly $800 million worth of HP’s stock,” Whitman wrote in a statement. “So, I can assure you that my interests are completely aligned with those of our shareholders.”

I believe you meant "Whitworth wrote in a statement," unless I read the linked material incorrectly?

“The firm that I represent, Relational Investors, owns roughly $800 million worth of HP’s stock,” Whitman wrote in a statement. “So, I can assure you that my interests are completely aligned with those of our shareholders.”

I believe you meant "Whitworth wrote in a statement," unless I read the linked material incorrectly?

1) Why did it take this long to boot these people out? All these months? (Years?)

2) Will there be any consequences for these people? Or will they recieve some sort of continued perks 'just because'?

It seems that once someone crosses an illusive threshold these days in the financial world they become untouchable. Apotheker, for example, essentially ruined many people's lives, yet he still managed to leave with a severence package that lesser people will never earn in a lifetime. He, and numerous others, managed to cross that threshold and will thus never have to concern themselves with money again.

1) Why did it take this long to boot these people out? All these months? (Years?)

2) Will there be any consequences for these people? Or will they recieve some sort of continued perks 'just because'?

It seems that once someone crosses an illusive threshold these days in the financial world they become untouchable. Apotheker, for example, essentially ruined many people's lives, yet he still managed to leave with a severence package that lesser people will never earn in a lifetime. He, and numerous others, managed to cross that threshold and will thus never have to concern themselves with money again.

In Apotheker's defense, he was essentially a scapegoat. The board wanted to make HP the next IBM so they hired Leo. When that strategy failed they blamed him for it.

In reality research has shown that the vast majority of golden parachutes are undeserved. CEOs earn far more than the value they provide. Their job is largely to take the blame when the shit hits the fan so the board members can keep their cushy jobs.

In return they get paid to not cause trouble when fired. It wouldn't be too far off to equate golden parachutes with hush money.

In Apotheker's defense, he was essentially a scapegoat. The board wanted to make HP the next IBM so they hired Leo. When that strategy failed they blamed him for it.

HP has been obviously trying to ape IBM since Carly Fiorina (blech)'s days. Apotheker cannot claim ignorance of the fact that HP has been consistently and pathetically failing at the attempt under the existing board. He should have either 1) demanded change on the board, 2) accepted that HP's optimal business model lies elsewhere, or 3) declined the opportunity to mess with the careers of thousands of people in the hopeless process of pounding a square peg into a round hole.

Even though I'm sure they know they are in trouble, I don't think their board even remotely understands what a bunch of morons EVERYONE thinks they are. This entire board needs to go, and yesterday, if not years ago. The fact that they just recently reelected the whole board slate shows how clueless they are.

If they can't muster the guts to replace at least half the board, they deserve the fact that every tech person AND analyst is staring in slack-jawed disbelief at them. They are thinking "gee, I'm a board member of a BIG important company, raking in the moola for practically nothing," when they don't understand that the longer each of them is associated with this debacle of their own creation, the more their reputations crater.

This fiasco could (and should) spur a complete overhaul of public corporation governance rules all by itself.

They are thinking "gee, I'm a board member of a BIG important company, raking in the moola for practically nothing," when they don't understand that the longer each of them is associated with this debacle of their own creation, the more their reputations crater.

I think their brimming bank accounts help to offset their lack of introspection.

And sadly, many of them will still find other income opportunities without much trouble. Look at all the discredited politicians (some who are convicted criminals) who land cushy speaking, writing, and pundit jobs despite the damage they have caused in their previous careers. Type-A sociopaths don't concern themselves with the little people.

Even though I'm sure they know they are in trouble, I don't think their board even remotely understands what a bunch of morons EVERYONE thinks they are. This entire board needs to go, and yesterday, if not years ago. The fact that they just recently reelected the whole board slate shows how clueless they are.

If they can't muster the guts to replace at least half the board, they deserve the fact that every tech person AND analyst is staring in slack-jawed disbelief at them. They are thinking "gee, I'm a board member of a BIG important company, raking in the moola for practically nothing," when they don't understand that the longer each of them is associated with this debacle of their own creation, the more their reputations crater.

This fiasco could (and should) spur a complete overhaul of public corporation governance rules all by itself.

They are thinking "gee, I'm a board member of a BIG important company, raking in the moola for practically nothing," when they don't understand that the longer each of them is associated with this debacle of their own creation, the more their reputations crater.

I think their brimming bank accounts help to offset their lack of introspection.

And sadly, many of them will still find other income opportunities without much trouble. Look at all the discredited politicians (some who are convicted criminals) who land cushy speaking, writing, and pundit jobs despite the damage they have caused in their previous careers. Type-A sociopaths don't concern themselves with the little people.

This...

There appears to be a country-club mentality in those circles, where who you know (connections) matter far more than what you know (competence).

The real danger is that it creates an echo chamber, of sorts, choking off new ideas and the people to carry these innovations forward.

“So, I can assure you that my interests are completely aligned with those of our shareholders.”

That statement right there pretty much summed up his focus. Granted, maybe he's the type of investor that understands focusing on customer satisfation, innovation, etc leads to long term growth and profit. But, when folks bluntly come out and just state "I'm thinking of the shareholders" I take it as a huge red flag.

But, when folks bluntly come out and just state "I'm thinking of the shareholders" I take it as a huge red flag.

Unfortunately you clipped off the rest of the sentence:

"' wallets and what it would take to empty theirs while filling mine."

Corporate executives are well-paid with bonuses (thanks to the compensation committee and the board of directors) and a long list of perks.

Anything they might make from owning the company's stock (and/or buying & selling on inside information, regadless of the rules that say they can't) is simply gravy on top of the frosting on top of the cake on top of the hooker's bare ass.

The good news is Lane is gone and the bad news is Whitman is still there. At eBay she spent $ 3.1B for Skype and then wrote off 50%. In that deal they forgot to get the IP and had to pay another $600M for it.